No matter what, the time will come where you need to terminate an employee. The reason is generally immaterial, unless it is illegal or discriminatory, whether it is performance-related or simply a bad cultural fit, not every employee you hire will work out. The most important, and most often asked, question is: what do I need to do to fire this person?
Documentation is very important, and should begin when an employee is hired. Every employee should have a personnel file, and in that file you should document any warnings, discipline or efforts to improve employee performance. While many states have at will employment, it is still beneficial to have documentation of the reasons for the termination, preferably in advance. However, if your recordkeeping is lax, you should create a document outlining all of the incidents, problems and issues with the employee in as much detail as you can recall prior to termination.
Reviewing the employee’s personnel file prior to termination can also reveal some important details. For example, if the employee has filed sexual harassment complaints, filed a claim with OSHA or informed you of impending FMLA leave, you could face a claim for retaliation. Without a clear history of misconduct, your chances of prevailing in a retaliation lawsuit are much less likely.
As I have previously discussed, it is very helpful to have an employee handbook that clearly sets forth your policies. Particularly when the terminated employee is a member of a protected class, you are much more likely to prevail in a wrongful termination suit if you can show clearly written policies that the employee violated, rather than an informal set of unwritten rules.
You should always be truthful with the terminated employee regarding the reasons for termination, but avoid going into more detail than required. While providing a false reason for termination may seem to spare the terminated employee’s feelings, it can create significant issues if he or she files a lawsuit. A false reason for termination will likely be found out, and then your credibility will take an irreversible hit in the eyes of the jury.
Lastly, before informing the employee of the termination, you should have a plan in place regarding the employee’s access to the company computer system and other sensitive information. It is advisable to inform the IT department to revoke the employee’s access to the company computer system once the termination meeting is underway. Preventing access will prevent both the infamous angry departure email to the whole company and ensure that sensitive data is not transferred without your knowledge. Whether or not you realize it, your business may have trade secrets that a terminated employee could use against you. During the meeting you should also request the employee return any company equipment, keys, keycards and any other company property.
Each and every termination is unique, and retaining legal counsel to provide advice regarding terminations will help avoid many pitfalls, particularly with members of protected classes. Legal counsel can also help draft a termination letter, if you wish to utilize one, and a separation agreement, which can provide the employee financial support for a period of time after termination in return for releasing you from any liability.